The total foreign capital outflow from Indonesia’s capital market reached Rp 11.75 trillion (US$ 1.37 billion) due to negative sentiments in the global economy. Investors prefer to hold standby cash rather than retaining portfolio in stocks, in anticipation of difficulties in redemption, according to analysts.
In the domestic market, the net sell value of overseas investors reached Rp 5.32 trillion from August 3 to 11, 2011, with the highest reached on August 5 at Rp 1.23 trillion and August 8 with Rp 1.14 trillion.
Meanwhile, foreign ownership in the state bond market reached Rp 243.19 trillion (34.79 percent) as of August 10, a decrease from Rp 249.62 trillion (35.71 percent) in August 5.
Betrand Reynaldi, Head Researcher of e-Trading Securities, said that foreign investors are diverting their funds to safe haven instruments such as gold and U.S. Treasury Bills, following concerns on the worsening global financial situation. In such conditions, foreign investors require standby cash.
Betrand added that the Federal Reserve plans to provide stimulus, as the third stage of quantitative easing may not be sufficient enough to speed up the US's economic recovery, as seen from the minimal effect of the previous stimulus implemented in March 2010.
This will impinge on the performance of the Composite Stock Price Index (IHSG), according to Bertrand, which may be unpredictable in the coming three months. Moreover, negative sentiment surged when France suffered a rating downgrade.
Dow Jones was corrected 4.62 percent and S&P sank 4.42 percent. Meanwhile, the Nikkei retreated 0.63 percent, Hang Seng declined 0.95 percent and the Straits Times slipped one percent. IHSG, on the other hand, edged up 0.15 percent after having been pressured by three percent.
Ito Warsito, Chief Director of the Indonesia Stock Exchange (IDX), said that the foreign capital outflow should not be a concern as Indonesia’s economic fundamentals are still strong, as seen from the high interest of local companies in looking for financing through the capital market.
As of yesterday, foreign investors still booked a Rp 18.02 trillion net buy. “The value may continue increase considering the high Index potential to appreciate until late this year," he said.
In the domestic market, the net sell value of overseas investors reached Rp 5.32 trillion from August 3 to 11, 2011, with the highest reached on August 5 at Rp 1.23 trillion and August 8 with Rp 1.14 trillion.
Meanwhile, foreign ownership in the state bond market reached Rp 243.19 trillion (34.79 percent) as of August 10, a decrease from Rp 249.62 trillion (35.71 percent) in August 5.
Betrand Reynaldi, Head Researcher of e-Trading Securities, said that foreign investors are diverting their funds to safe haven instruments such as gold and U.S. Treasury Bills, following concerns on the worsening global financial situation. In such conditions, foreign investors require standby cash.
Betrand added that the Federal Reserve plans to provide stimulus, as the third stage of quantitative easing may not be sufficient enough to speed up the US's economic recovery, as seen from the minimal effect of the previous stimulus implemented in March 2010.
This will impinge on the performance of the Composite Stock Price Index (IHSG), according to Bertrand, which may be unpredictable in the coming three months. Moreover, negative sentiment surged when France suffered a rating downgrade.
Dow Jones was corrected 4.62 percent and S&P sank 4.42 percent. Meanwhile, the Nikkei retreated 0.63 percent, Hang Seng declined 0.95 percent and the Straits Times slipped one percent. IHSG, on the other hand, edged up 0.15 percent after having been pressured by three percent.
Ito Warsito, Chief Director of the Indonesia Stock Exchange (IDX), said that the foreign capital outflow should not be a concern as Indonesia’s economic fundamentals are still strong, as seen from the high interest of local companies in looking for financing through the capital market.
As of yesterday, foreign investors still booked a Rp 18.02 trillion net buy. “The value may continue increase considering the high Index potential to appreciate until late this year," he said.
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